Washington Post 2011 Annual Report Download - page 80

THE WASHINGTON POST COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. ORGANIZATION AND NATURE OF OPERATIONS
The Washington Post Company, Inc. (the Company) is a diversified
education and media company. The Company’s Kaplan subsidiary
provides a wide variety of educational services, both domestically
and outside the United States. The Company’s media operations
consist of the ownership and operation of cable television systems,
newspaper publishing (principally The Washington Post), and
television broadcasting (through the ownership and operation of six
television broadcast stations).
Education—Kaplan, Inc. provides an extensive range of
educational services for students and professionals. Kaplan’s various
businesses comprise four categories: Higher Education, Test
Preparation, Kaplan International and Kaplan Ventures.
Media—The Company’s diversified media operations consist of
cable television operations, newspaper publishing and television
broadcasting.
Cable television. Cable ONE provides cable services that include
basic video, digital video, high-speed data and telephone service
in the midwestern, western and southern states of the United States.
Newspaper publishing. Washington Post Media publishes The
Washington Post (the Post), which is the largest and most widely
circulated morning daily and Sunday newspaper, primarily
distributed by home delivery in the Washington, DC, metropolitan
area (including large portions of Maryland and northern Virginia).
Washington Post Media also produces washingtonpost.com, an
Internet site that features news and information products, as well as
the full editorial content of the Post. Through the Company’s other
newspaper publishing businesses, the Company also publishes
weekly publications and tabloids distributed within the Washington,
DC, metropolitan area and elsewhere, and produces other websites.
Television broadcasting. The Company owns six VHF television
stations located in Houston, TX; Detroit, MI; Miami, FL; Orlando, FL;
San Antonio, TX; and Jacksonville, FL. Other than the Company’s
Jacksonville station, WJXT, the Company’s television stations are
affiliated with one of the major national networks.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Fiscal Year—In 2011, the Company changed its fiscal year from a
52 to 53-week fiscal year ending on the Sunday nearest
December 31 to a quarterly month end, with the new fiscal year
ending on December 31 of each year. Fiscal year 2011, which
ended on December 31, 2011, included approximately 52 weeks.
The fiscal years 2010 and 2009, which ended on January 2,
2011, and January 3, 2010, respectively, included 52 and 53
weeks, respectively. Subsidiaries of the Company report on a
calendar-year basis, with the exception of most of the newspaper
publishing operations, which report on a 52 to 53-week fiscal year
ending on the Sunday nearest December 31.
Basis of Presentation and Principles of Consolidation—The
accompanying Consolidated Financial Statements have been
prepared in accordance with generally accepted accounting principles
(GAAP) in the United States and include the assets, liabilities, results of
operations and cash flows of the Company and its majority-owned
and controlled subsidiaries. All significant intercompany accounts and
transactions have been eliminated in consolidation.
Reclassifications—Certain amounts in previously issued financial
statements have been reclassified to conform with the 2011
presentation, which includes the reclassification of the results of
operations of certain Kaplan businesses as discontinued operations
for all periods presented.
Use of Estimates—The preparation of financial statements in
conformity with GAAP requires management to make estimates and
judgments that affect the amounts reported in the financial statements.
Management bases its estimates and assumptions on historical
experience and on various other factors that are believed to be
reasonable under the circumstances. Due to the inherent uncertainty
involved in making estimates, actual results reported in future periods
may be affected by changes in those estimates. On an ongoing basis,
the Company evaluates its estimates and assumptions.
Business Combinations—The purchase price of an acquisition is
allocated to the assets acquired, including intangible assets, and
liabilities assumed, based on their respective fair values at the
acquisition date. Acquisition-related costs are expensed as incurred.
The excess of the cost of an acquired entity over the net of the
amounts assigned to the assets acquired and liabilities assumed is
recognized as goodwill. The net assets and results of operations of
an acquired entity are included in the Company’s Consolidated
Financial Statements from the acquisition date.
Cash and Cash Equivalents—Cash and cash equivalents consist of
cash on hand, short-term investments with original maturities of three
months or less and investments in money market funds with
weighted average maturities of three months or less.
Restricted Cash—Restricted cash represents amounts held for
students that were received from U.S. Federal and state
governments under various aid grant and loan programs, such as
Title IV of the U.S. Federal Higher Education Act of 1965, as
amended, that the Company is required to maintain pursuant to
U.S. Department of Education and other regulations. Restricted cash
also includes certain funds that the Company may be required to
return if a student who receives Title IV program funds withdraws
from a program.
Concentration of Credit Risk—Cash and cash equivalents are
maintained with several financial institutions domestically and
internationally. Deposits held with banks may exceed the amount of
insurance provided on such deposits. Generally, these deposits may
be redeemed upon demand and are maintained with financial
institutions with investment grade credit ratings. The Company
routinely assesses the financial strength of significant customers, and
this assessment, combined with the large number and geographical
diversity of its customers, limits the Company’s concentration of risk
with respect to trade accounts receivable.
68 THE WASHINGTON POST COMPANY